France grants PHP41.3 million to support financial inclusion in PHL

The Bangko Sentral ng Pilipinas (BSP), and the Agence Française de Développement (AFD) signed a grant facility agreement of 700,000 Euros (around PHP 41.3 million) aiming at supporting the BSP to increase capacities for financial inclusion, especially among rural and women-owned enterprises.

The BSP was the first central bank in the world to establish a dedicated financial inclusion office in 2007. Since then, it has continuously nurtured an enabling regulatory environment and fostered multi-stakeholder cooperation for financial inclusion.  A strategic thrust of the BSP is the development of an inclusive digital finance ecosystem that caters to the diverse and evolving needs of the broader population, especially in the agriculture and micro, small and medium enterprise (MSME) sectors.

Aligned with BSP’s strategic thrust and the global financial inclusion agenda, this grant will fund a technical assistance (TA) program to support BSP’s efforts to leverage technology for the effective regulation of digital finance, promote digital financial literacy of rural and women-owned businesses, contribute to public policy dialogue on agricultural insurance.

“We welcome this maiden technical assistance program of the AFD for the BSP. This endeavor demonstrates our organizations’ shared commitment to advance financial inclusion in the country through responsible digital innovations. The BSP looks forward to a fruitful collaboration with AFD as we implement the program in the next five years.” said Governor Diokno, head of the BSP.

For his part, AFD Country Director Laurent Klein welcomed the conclusion of this agreement with the BSP as the main supervisor and regulator of the Philippine financial system. “In line with our organization’s strategic objectives to support financial systems and fight social and economic inequalities, the project that will result from this cooperation will contribute to the country’s efforts to promote access to quality financial services for all, including the most vulnerable part of the population,” Mr. Klein, AFD director in the Philippines, stated.

“France welcomes this new milestone in our bilateral relationship with the Philippines. We are keen to support the Government of the Philippines, through AFD, in strategic reforms towards digital transformation and inclusion. The COVID-19 pandemic gave rise to challenging situations, but also opportunities to leverage on digital technologies to improve financial sector services that would ultimately benefit Filipinos from all walks of life,” said French Ambassador Michèle Boccoz.

This grant complements the Inclusive Finance Development Program, a program which AFD has been supporting since 2019 alongside the Asian Development Bank (ADB), through a 100 million Euro sovereign policy-based loan to the Philippines. The IFDP contributes to the overall objective of inclusive growth and sustainable development in the country, by supporting financial inclusion efforts, especially those from the low-income and rural sectors. More specifically, its objectives are to contribute to the consolidation of the institutional and regulatory environment, the improvement of financial infrastructures and the capacity building of financial services providers, and the supervisors and regulators.